Bitcoin (BTC) Volatility Reaches Historic Lows, Signaling a Possible Shift in Market Behavior

This could mean a more mature and resilient asset, but some wonder if it also signals a lack of excitement for traders.

Bitcoin (BTC) volatility has fallen to historic lows, indicating a possible shift in the market. This change could signal a more mature and resilient asset. However, some traders may wonder if it also signifies a lack of excitement.

A recent report from Glassnode reveals that Bitcoin’s three-month realized volatility has dropped below the 50% mark. In previous bull cycles, price swings commonly exceeded 80% or even 100%, making Bitcoin a highly unpredictable investment. But now, the asset appears to be stabilizing, potentially encouraging more institutional investors to enter the space.

This shift coincides with a greater market consolidation under the control of large entities. Analysts observe that big investors are absorbing more BTC, reducing the impact of smaller retail traders. As a result, the market no longer experiences extreme price crashes triggered by panic selling.

Bitcoin Annualized Realized Volatility |Source: Glassnode

Bitcoin Climbs Steadily — No More Crashes

A notable change is occurring in Bitcoin’s price behavior. Instead of sharp highs followed by deep crashes, the market now follows a “stair-stepping” pattern. Price rallies lead to periods of consolidation rather than sudden collapses, making Bitcoin appear more stable as a store of value.

Bitcoin Bull Market Correction Drawdowns | Source: Glassnode

Institutional investors have played a significant role in this transformation. The launch of U.S. spot Bitcoin ETFs has allowed major financial firms to gain exposure in a structured and regulated manner. To date, these ETFs have attracted over $40 billion in net inflows, contributing to Bitcoin’s newfound stability.

Furthermore, Bitcoin’s role as a macroeconomic asset is expanding. Countries like El Salvador and Bhutan have heavily invested in the cryptocurrency, and in the U.S., discussions are underway about its potential as a strategic reserve asset. Standard Chartered’s Head of Digital Assets Research, Geoff Kendrick, noted:

“Trump’s January 23 order that the administration evaluate a potential national digital assets stockpile is also important, as this could encourage other central banks to consider Bitcoin investments.”

If the U.S. government proceeds with a national Bitcoin reserve, volatility could decline even further. This move could attract risk-averse investors who were previously hesitant due to Bitcoin’s unpredictable price movements.

Bitcoin’s Stability Strengthens Bullish Projections

According to crypto analytics firm Unfolded, Bitcoin’s annual volatility has reached its lowest level on record. However, despite this decline, BTC’s risk-adjusted returns continue to outshine most major asset classes, reinforcing the case for Bitcoin as a strong long-term investment.

Bitcoin Volatility | Source: unfolded

Kendrick supports this view, stating, “As volatility falls, Bitcoin’s share of an optimized two-asset portfolio with gold increases. Investor access and lower volatility should lead to price appreciation longer-term as portfolios continue to move towards their optimal/logical state.”

Kendrick has made a bold projection for Bitcoin, anticipating a surge to $500,000 by the end of 2028. He envisions a parabolic growth phase between 2025 and 2028, with Bitcoin reaching $200,000 by late 2025, $300,000 in 2026, and $400,000 by 2027 before hitting the half-million mark. He attributes this aggressive price outlook to enhanced investor access and declining market volatility.

Bitcoin prediction to reach $500,000 | Source: Standard Chartered

That would be good news for the Bitcoin price and for Bitcoin investors. If you’re wondering what crypto to buy right now, perhaps it is not too late to get a position in Bitcoin? If these Bitcoin price predictions are accurate, it is still early and Bitcoin will still deliver profits to investors with a long term time horizon. HODL.